McLeod Russel Working On A Debt Restructuring Plan With Bankers

Bulk tea producer McLeod Russel India Ltd., a part of the Williamson Magor group, is in talks with the bankers for restructuring its debt, a company official said on Monday.

The company's short and long-term debt amounts to around Rs 1,700 crore.

"We are keen for a debt restructuring for which discussions with the bankers are on. We are trying to give a proposal through SBI Caps for conversion of short-term loans into long-term and also reduction of interest rates", McLeod Russel Chairman and Managing Director Aditya Khaitan said on the sidelines of the company's annual general meeting in Kolkata.

McLeod Russel has used the Rs 90 crore it received from the sale of two tea estates to Goodricke Group Ltd. to repay a part of its debt, said Khaitan.

In his reply to shareholders' queries on lending Rs 1,800 crore to group firm McNally Bharat, Khaitan said, "In hindsight, it appears that it was a mistake. We wanted to see if that money could help turnaround of McNally Bharat. It has taken a toll on the company and the group." There was no fresh lending to McNally Bharat after that.

Khaitan said that the tea industry is going through a rough patch.

"Production in the organised sector is stagnant. Growth is only from the bought leaf factories which are cluttering the market", he said. According to him, the government needs to regulate the growth of bought leaf factories.